Q&A with Marty Staff

Marty Staff has had a fascinating 30-plus-year career in the industry, including stints at Bloomingdale’s, Ralph Lauren, Calvin Klein, Hugo Boss, JA (Joseph Abboud) Apparel and, most recently, American Apparel. We met with Marty at his regular table at the Soho House, a private club near Manhattan’s meatpacking district, and got his take on how the business has changed, the state of innovation, product, and what it will take to succeed in the next phase of retailing’s evolution.

Q. How did you get into this industry?

A. I graduated from Dartmouth College in 1972, and I honestly didn’t know what to do, so I moved back to NY, where I was from, and applied to and was accepted to UC Irvine for grad school in English. I had some time before grad school, so I went to Bloomingdale’s to try to work as a salesperson for a few months. I had a good pedigree, so they offered me a job as executive trainee, and I took it because it paid $500 more than a salesperson. My first day was September 3, 1973. I thought I would be the smartest person at Bloomingdales, and when I got there, everybody was smarter, quicker, better looking, funnier, and knew more than me – it was this magical time there. My first boss was Julian Geiger, of Aeropostale. He was brilliant – had a couple of master’s degrees, he had great taste, and was crazy, funny, irreverent. One day after I was there about a month, he said to me, “I want you to set up some sweaters.” And in came about 2,000 sweaters in about 15 colors, and it was my job to make sure this color would look good next to another one. To me, it was the most exciting thing I’d ever done. It was art. And then the customers came by and started buying them. It was immediate gratification! For the next seven years, every time I got bored, Bloomies was smart enough to promote me. I was in men’s, kids, home, women’s apparel – it was a wildly satisfying career. I was one of the chosen few to have a fast track career. In the last couple of years there, I got friendly with Ralph Lauren. He was starting a children’s business at Bloomingdale’s, and I got to work with him and his team. That year his men’s business was only $50 million. He then hired me to be head of sales. I stayed for about 7 years.

Q. Then you went to Calvin Klein?

A. Calvin realized Ralph’s business was eclipsing him. So he went and hired all Ralph Lauren people – me and many others. He staffed his whole place with Ralph Lauren people. One by one they all left except me, because I loved Calvin’s aesthetic. I was Senior Vice President of Retail Development and Licensing, and my job was to get him into the retail business, to get him a stronger licensing base, and really to speak for him with the stores. Then three or four years into it, Calvin said he wanted to get back into the men’s business. I convinced Calvin that we should license menswear, and the only candidate was GFT. So I moved over to run Calvin’s business at GFT. I worked with Calvin for a total of 10 years.

Q. How did you end up at Hugo Boss?

A. I left Calvin when Hugo Boss asked me to be CEO. Boss went from $70 million and no profits to $350 million and very profitable. As you know, I flew a little too close to the sun. I decided I would run the world, on an unauthorized basis. I didn’t fully understand what was happening, but I did know that I had absolute clarity of vision of what the brand may be, and that I might not always have that, so I figured I would step on the gas and do it. My predecessors didn’t understand there was a relationship part of the business. The company wasn’t well liked, and the consumer thought Hugo Boss was Miami Vice, so I became the face of the brand. I did it better than I thought I could have. Then one day my German boss said “This isn’t about Marty, this is about the brand.”

By the way, they were right. We would do crazy things. The first year, I inherited a Hugo Boss sponsorship with the Sundance Film Festival. I went the first year, and we got nothing for the sponsorship. I couldn’t even get in to see the movies. So the next year we took the money we would spend on the sponsorship, and rented a house nearby and held parties. All the celebrities had nothing to do at night, so it really put the brand on the map. For a publicly-held company, it broke all the rules. One GQ ad with all the prep would cost $75K. So I cancelled one ad and bought 100 helicopter trips for the buyers.

Q. Do you believe that we’re heading into a period of great innovation?

A. I think the pendulum is swinging back to art from science or from financial engineering. I was with Brendan Hoffman last week, CEO of Lord & Taylor, he’s thinking of putting C-Wonder outposts in his stores. C-Wonder is a store started by Tory Burch’s ex-husband, and he uses words in his ads like Joy, Cherish…they’re wonderfully magical, emotional words. I think the fact that there’s an emotional attachment is resonating. The idea of re-injecting art into what you do and having the concept be really legitimate, which is in large contrast to the Kellwoods and PVHs of the world that are all selling the same stuff. I’m wearing these jeans today. They’re from a store called 3×1, started by a fellow named Scott Morrison. You pick out a denim you like, a grommet, a stitch color. There are 15 or so tailors there who make the jeans. If you go to Macy’s and ask the salesperson “What kind of denim is in these jeans?” They wouldn’t even know what denim is. But you ask Scott, he’s got 20 bolts of fabric, all rarified, it becomes curated, art, and it’s an experience. Everyone is marketed to so constantly that you have to wade through too much to find what’s authentic. When I walk into a store these days, I look for something that resonates in an authentic way. Every year, I buy my wife about 50 gifts for Christmas – the Orvis this, the LL Bean that….This year, I called up a resort in Anguilla that we love and asked them to send me some sand, because she loves the beach. I called up my vet and asked about animal rescue places because I want to support them, even work there. People are looking more for that kind of stuff.

Q. The Price-Value relationship is a topic that is on everyone’s mind these days. What must consumer-facing businesses and brand managers keep in mind regarding price, and what does value mean today?

A. I think consumers are starting to understand what’s real and authentic, and what’s just body covering. I think that’s part of the reason for Gap’s demise. What Uniqlo is doing is pretty great, and it’s going to hurt Gap the most. Uniqlo product is better made, at better prices, with a lot more attitude, which is the real deal. Value means it’s got to be the best made garment for the price it’s being sold at. For $295, these 3×1 jeans that I’m wearing were made by artisans, and are absolutely worth it. Conversely, if you go to one of the chain stores, and pay $39, for a pair that’s going to fall apart and made like crap. Two-thirds of American dress shirts are made by the same company in Asia. The difference is fabric and make, but it’s also brand equity. I can remember at Calvin Klein, Calvin and Donna Karan had great contribution into how men should dress. Calvin and Giorgio Armani Collezione were made in the same factory at GFT. Calvin would put his collection suits $1,000 and Armani for $1,400. Same mills, same people making them.

Q. Do you think the department stores like Macy’s and JCPenney are now able to evolve their business model into experiences, great experiences for customers?

A. I think it’s really difficult. When I started in the business, it was independent specialty store-based, which has clearly disappeared, for all the reasons we know. It used to be conventional wisdom that multibrand stores were safer than monobrand stores. That’s no longer the case, because monobrand stores invest so much in marketing. So multibrand stores are in peril. It used to be that big suppliers would work with specialty stores to provide credit, but that’s all dried up with the new financial systems at these public companies. So the businesses moved to the big department stores, which appeals to the lowest common denominator. There’s really very little localization of buying. Terry is trying to do it at Macy’s, but I think it’s been with limited success. If you go to Macy’s, you’ll never get waited on. One of the reason the Internet is getting so big is that the shopping experience is getting lost.

Q. Will Ron Johnson transform JCPenney, as opposed to just improving the experience? I ask this on the heels of what he did with Martha Stewart – is that a forerunner strategy?

A. I think it’s interesting that the biggest retailer in New York City is now Apple, and the store on 60th St. and 5th does more business than Bloomingdale’s does. Part of what he did at Apple was to change the entire mindset of the organization. I think that Penney’s is now being run by someone with a very different mindset than his people, who are all May Company individuals. If anyone can do it, it’s probably him. But it’s going to take a while. The apparel sector isn’t growing much, so it’s really a market share thing, so it will probably be at the expense of Macy’s. The Martha Stewart purchase is a shot across the bow of the boat, to let them know they’re in business. I don’t think it was a tired deal. I think it will give a legitimacy to Penney. When I walk into a Penney store, I can’t find one woman’s item I want to buy.

Q. You’ve spent most of your career in men’s products. What can you tell us about how male consumers behave, how they dress, how they shop – and is this changing?

A. America is a casual society, and I don’t see that ever changing. Men define themselves by their family, job, hobbies – not their clothes. Within that, though, there will be little pockets of fashion, with men looking to express themselves a bit more, and in a bit more authentic way, and in a way that’s a bit more personalized. Like you can buy a pair of Converse sneakers, and customize the colors. There is a whole new direction of bespoke casual. What I think is not going to be successful is the boring sameness you see in most stores. – all the Arrow shirts and private label lambswool sweaters. Guys shop when they have to, and they’ve been trained to buy on price. The process of buying is painful. There are some exceptions to that, of course. Bloomingdale’s jeans department is a fun place to shop. Brooks Brothers has done a great job bringing back to life a heritage brand without making it too young.

Q. Don’t you think if stores are going to drag people away from the Internet, they’re going to have to have a compelling in-store experience?

Every time Apple comes out with a new product, I purposely don’t preorder it, because I want to go to the store and be on the hunt for it. When you finally get it, you feel so great that you finally have it. When a designer delivers a line to a new store, you don’t have that, but I think you’re going to have it in the future. I think bricks and mortar is going to become a portion of the presentation of product to the consumer, but maybe not even the primary portion.

The world is changing radically. If something is compelling enough, people will go to it. There’s a barbecue place called Hill Country. I choose my hotel based on whether they’ll deliver to the hotel. At some point, Amazon’s going to have to customize. So many people are buying gift wrapped things from Amazon, everyone’s tree will have the same gift wrap under it.